EU appeals against WTO ruling in dispute over Airbus subsidies

Reuters Staff

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Airbus's logo is seen during Japan Aerospace 2016 air show in Tokyo, Japan, October 12, 2016. REUTERS/Kim Kyung-Hoon

BRUSSELS (Reuters) - The European Union launched an appeal on Thursday against a World Trade Organization (WTO) panel finding last month that it had failed to rein in billions of dollars of subsidies to planemaker Airbus (AIR.PA).

The WTO’s 574-page ruling is part of a series of tit-for-tat transatlantic complaints about aircraft subsidies that together make up the world’s largest trade dispute, still raging after 12 years of arguments.

The WTO said the EU and four nations - Britain, France, Germany and Spain - had failed to comply with earlier rulings against all but two of 36 contested measures, including billions of dollars of European government loans to Airbus.

However, the EU disagreed with the conclusion that, even though most of the subsidies challenged by the United States had ended, the EU had not yet fully complied with a previous ruling, the European Commission said in a statement.

The EU also considered that the panel made several errors in its assessment of the alleged harm that these subsidies caused to Airbus rival Boeing (BA.N).

U.S. officials said Airbus had failed to undo subsidies worth $22 billion, including $4 billion for the A350, on which Airbus’s prospects in the wide-body jet market largely depend.

The European Commission said the $22 billion figure reflected the face value of all repayable loans granted to Airbus and had nothing to do with the actual amount of subsidies.

It also said the WTO panel had sided with the EU on some points, such as that there had been no prohibited subsidies for the Airbus 350 XWB or A380 models and that most of the other subsidies challenged by the United States had come to an end.

“The present appeal should be seen in the context of two on-going WTO challenges brought by the EU against billions of U.S. subsidies to Boeing for its aircraft production,” the Commission added.

Reporting by Philip Blenkinsop; Editing by Alissa de Carbonnel and Mark Potter